Palm Oil in BioFuels: EU Trying to Prevent Another Trade War

In a bid to appease both the palm oil producers and the environmentalists, the European Union set new criteria for the use of palm oil in biofuels.

Palm
oil producers lobby to defend its future:

Malaysia,
Columbia, and Indonesia are the biggest producers of this vegetable
oil and accounts for nearly 90% of the global supply. They are
lobbying in Brussels to make sure it remains in the European market.
They have decided to challenge the bill passed by the EU through
consultations and if that fails, they are likely to approach the WTO.
The Council of Palm Oil Producing countries has challenged the bill
calling it scientifically flawed and argued that the EU is targeting
only palm oil leaving aside other vegetable oils which are riskier
for the environment. The council warned that the discriminatory
measures taken to curb the palm oil shipments will be retaliated if
not withdrawn.

After
the EU environmental campaign, the prices of this oil has dropped by
15%. In the wake of this bill, Malaysia has decided to stop its oil
plantation expansion. Meanwhile, Indonesia said that the restrictions
on palm oil will setback the country in its fight against poverty and
that the EU had to find a different solution which benefits everyone
involved.

What
is in the EU bill?

Though
the exact details of the regulation are yet to be known, the draft
version that was released for input mentioned palm oil as
unsustainable but also mentioned about exemption including the use of
palm oil as a biofuel. The EU allowed the commission to set criteria
for palm oil so that it still needs the green goals and yet be used
as diesel. It also mentioned about phasing out by 2030.

The
commission in its statement said, “With today’s decision the
member states will still be able to use and import fuels in the
category of high ILUC-risk biofuels, but they will not be able to
include these volumes when calculating the extent to which they have
fulfilled their renewable targets. Climate change is a serious
concern for Europeans, and the commission is increasing efforts to
reduce greenhouse gas emissions.”

The
European Union in an effort to prevent global warming has put in
place measures to reduce the greenhouse gases which are the major
cause for climate change. However, it is also doing a balancing act
of not triggering a trade war with the palm oil producing Asian
countries.

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